Are you ready to buy a house? Let us explore the top signs you might be ready to stop renting and fire your landlord.
There are a few key factors to consider when determining whether you are ready for a mortgage:
- Credit score: Most lenders prefer to work with borrowers who have a credit score of 620 or higher. A higher credit score will generally result in a lower interest rate on your mortgage.
But don't fret - if your credit is challenged, you might still be able to qualify for a mortgage. Ask us about possible available programs designed to assist buyers with credit that is less than perfect. Click here for more information.
- Debt-to-income ratio: Lenders will look at your debt-to-income ratio (DTI) to determine how much of your income is going towards paying off debt. A DTI of 36% or lower is generally considered to be a good number for getting a mortgage.
- Down payment: Most lenders require a down payment of at least 5% of the purchase price of the home. However, a larger down payment can lead to a lower interest rate and a better chance of being approved for a mortgage. But there are ways to get into a home with little or now down, click here to learn more.
Is not having a down payment keeping you from becoming a homeowner?
Click here to learn more about zero down payment programs, and call us to see if you qualify.
- Employment and income: Lenders will want to see that you have a stable job and a reliable income. It's generally a good idea to have been at your job for at least two years before applying for a mortgage.
- Savings: It's a good idea to have some savings set aside for emergencies and closing costs, which can range from 2% to 5% of the purchase price of the home.
If you meet these criteria, you may be ready to start the process of getting a mortgage, and you are probably closer to being a homeowner than you think. Contact The "A" Team today to get a more detailed understanding of what you need to do to prepare for a mortgage.
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